Problems with smooth internet connection

I've had little luck with these mtherfking connectivity problems in the past... but I'd mind as well ask once more.

I don't have enough experiences done in these cases I'm going to describe to make a positive conclusion, so the source of the problem could be a wide variety of things. However, I've done quite a few things to determine whether a particular solution works or not. If I didn't say I did something, you can assume I didn't do it.

-- Toshiba Satellite Laptop A135-S4527, nearly 2 years old now.
-- Windows Vista Home Premium.
-- There's an Ooma phone hub that sits between the modem and the router. It's our family's phone service, and we don't use a land line.
-- Ethernet cable connection from my laptop to the home router does not work for some reason; never got fixed. Direct connection to the modem works fine though.
-- Wireless Adapter: Atheros AR5006EG Wireless Network Adapter.
-- Display Adapter: Mobile Intel® 945 Express Chipset Family. (lmao)

Some days the lag spikes would rear its ugly head a LOT, and sometimes there are days without them. Generally it's been going on for a few weeks now though, but I'm unsure if it was gradual or not, due to the randomness of the lag spikes and the fact that most of them probably go undetected.

I checked for the latest updates on my hardware (but not Windows itself). Seems like they're all up to date.

I don't habitually update windows because my HD has a bad sector on it somewhere. Last time a windows update got written on there, I had to back up my files at the speed of a snail and reinstall Windows with a factory CD. Not fun. Yeah fk you Microsoft for failing on the "system backup and recovery" feature. Anyways, I finally got around to doing it, and for some reason it would just stay at 0% when it came to the SP2 update. I have no idea if that ever made it through, since after a while it just showed more updates. (some updates are supposed to be bottlenecks, forcing you to download those before you can download the more recent ones)

In terms of malware and viruses and whatnot, it seems pretty unlikely that I would get those, since I don't visit shady websites and I don't do the torrenting or pirating business. I won't rule out the possibility though, since other than that, my only forms of protection are Spybot S&D and a really outdated free version of Avast!. I don't even leave Windows Defender running because that pineappler doesn't have the option to stop scanning my stuff randomly.

I tried fiddling with the performance and power settings just in case the laptop was cheating on the wireless adapter and cut power to it or something. No apparent change. I also defragged the HD just in case.

I opened the Task Manager (ctrl+alt+del) and set it to the networking tab, and opened cmd and entered "ping -t 192.168.1.1", which causes it to ping the router until I tell it to stop. I then did a bunch of stuff that required constant internet use like speedtest.net or downloading videos, and occasionally I would see one or two pings that take 1000 ms, 2000 ms, or 3000 ms (not exact of course). That seems to me just random static and nothing characteristic of the lag spikes I've been getting while using programs. Maybe that was just on a good day =/

Whenever I'm at home and I'm trying to do stuff in general, occasionally I get a crazy lag spike. This isn't really noticeable if I'm just surfing the forums or watching videos. But when it comes to playing online games or having tea and scones with someone online, the problems become irritating. League of Legend's real time ping feature says my latency (ms) reaches 3000+ before it stops responding. In the meantime, I may or may not see other people doing their business, and sometimes I get to see all-out fights going on, with spells being chucked everywhere and whatnot. But during the lag spike, I cannot do anything that requires server interaction. This lasts several seconds, and in one case has resulted in me disconnecting.

On the rare occasion that I have friends coming over, and play League with me, I would sometimes get the lag spikes, but they wouldn't. However, if I reboot in the middle of a game (due to a graphics card problem), then EVERYONE seemingly disconnects for several seconds. Weird.

For the record, my wireless network uses WEP.

Unlike my own home's connection problems, the ones here are fairly different. Playing the same game League of Legends, we would be going about doing our business, but I would sometimes get lag spikes on a frequent basis. These spikes last 3-5 seconds, and all communication stops. My friends wouldn't get the same spikes (or claim not to), although occasionally all of us would get one. What's funny is that the real time ping feature doesn't register the lag spikes. Usually I restart or shut down my computer before heading over to his place, so that may be a factor in whether or not I get lag spikes. And as the match in League "warms up", I seem to get those lag spikes less often. On the good days, the lag spikes are virtually non-existant.

I have no idea what kind of router my friend uses, but the wireless network also uses WEP.

So far I think it's a hardware problem with my wireless adapter. Should I get an external wireless adapter? Or should I be doing something else? Or is there some magical brilliant solution that solves my problems?